ERAMET Group: 3rd quarter 2016 sales
(Thomson Reuters ONE) -
Paris, 09 November 2016
PRESS RELEASE
ERAMET Group: 3(rd) quarter 2016 sales
* Third-quarter sales in 2016 at 714 million euros, steadily increasing since
the start of 2016.
* Significant rise in manganese ore prices throughout third-quarter 2016 at a
higher level of 70% on average compared with the average of the first three
months of 2016 (source CRU). Very difficult market conditions at the start
of the year therefore justified a decision to lower manganese ore production
in Gabon, impacting the cumulative level of production at end-September.
* Nickel LME prices in third-quarter 2016 up by 21% on average compared with
the price at the start of 2016.
* At end-September, ERAMET increased its equity by 100 million euros through
the issue of net share settled undated bonds convertible into new shares
(ODIRNAN).
* Taking into account, on the one hand, the current rise in manganese prices
and to a lesser extent, the rise in nickel prices, and, on the other hand,
the successful implementation of productivity and cost reduction plans, the
ERAMET Group's current operating income for second-half 2016 is expected to
be significantly higher than that of first-half 2016 and become positive
again.
The ERAMET Group sales by branch of activity are available in the tables below.
-----------------------------------------------------------------------
Sales(1) (? million) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015
-----------------------------------------------------------------------
ERAMET Nickel 154 137 118 144 146
ERAMET Alloys 206 247 250 263 218
ERAMET Manganese 353 323 297 337 375
Holding company & eliminations 1 - 1 - -
ERAMET Group 714 707 666 744 739
--------------------------------------------+----------------------------------
Sales(1) Q3 2016 Q3 2015 Change|9 months 2016 9 months 2015 Change
(? million) |
--------------------------------------------+----------------------------------
ERAMET Nickel 154 146 6%| 409 542 (25%)
-------+
ERAMET Alloys 206 218 (6%)| 703 728 (3%)
-------+
ERAMET Manganese 353 375 (6%)| 973 1,093 (11%)
-------+
Holding company & 1 - -| 2 2 -
eliminations |
-------+
ERAMET Group 714 739 (3%)| 2,087 2,365 (12%)
-------+
(1 )Adjusted data from Group reporting in which the joint ventures are
accounted for under the proportional consolidation method. Reconciliation with
the sales published is presented in the appendices.
* ERAMET Nickel
After a 4.1% increase over first-half 2016 compared with the same period in
2015, global stainless steel production continued to increase over third-quarter
2016 (source ISSF).
In parallel, global nickel production is down slightly over the first nine
months of 2016 compared with the same period in 2015. This is linked to several
factors: closure of certain plants, reduction in nickel pig iron production in
China following a lengthy period of low prices, and cutbacks in production in
some long-standing industry players. All of these reductions have not been
offset by the ramp-up in newly commissioned plants, notably in Indonesia.
Furthermore, the impact of the conclusions of the audit conducted in the
Philippines, which may lead to new suspended or discontinued activities, is also
to be monitored with the utmost vigilance.
This situation has led to an increase in LME nickel prices over third-quarter
2016. The average for prices over the quarter was therefore up by 21% at USD
4.67/lb, compared with an average of USD 3.86/lb over first-quarter 2016.
At the end of third-quarter 2016, however, cumulative LME and SHFE nickel stocks
are still at a very high level (approximately 473,000 tonnes) which continues to
impact nickel prices, still preventing SLN from achieving its operating
breakeven.
Nickel metallurgical production at the Doniambo plant (New Caledonia) was up by
16% compared with the same period in 2015 and up compared with production for
the first three months in 2016. An operating incident took place on 31 October
in one of SLN's three electric furnaces. The responsiveness and efficiency of
the intervention teams meant that the consequences were limited and no one was
injured. The production rate for fourth-quarter 2016 should be marginally
impacted by this incident.
* ERAMET Alloys
Cumulative sales for ERAMET Alloys over the first nine months of 2016 are down
3% compared with the same period in 2015.
The aerospace sector, which sees steady growth, contributed significantly to
ERAMET Alloys sales, through new aircraft manufacturer programmes which require
high added value components for structures and engines. However, the impact of
social movements at the national level has negatively impacted Aubert & Duval's
business.
Moreover, the operating performance improvement plans have been pursued. Aubert
& Duval has continued with the industrial reorganisation of its sites in view of
improving its performance, particularly with the announcement made at the end of
October of a project to shut down the melting shop in Firminy, taking into
account the potential synergies with the steelworks in Les Ancizes. This
project, which will be subjected to an information and consultation procedure
with bodies representing staff from Aubert & Duval, may lead to the loss of
approximately sixty jobs, with affected employees being offered a redeployment
solution within one of the company's plants, prioritising those in the Auvergne-
Rhône-Alpes region.
October was marked by the opening of the MKAD plant, a joint venture between
Mecachrome and Aubert & Duval. MKAD, whose facilities are dedicated to the
machining of titanium parts, allows for Aubert & Duval to strengthen its
aerospace-grade titanium parts business, from the upstream through to the
delivery of finished parts.
* ERAMET Manganese
Gross global production for carbon steel, the main outlet for manganese, is down
slightly by 1.2% over the first nine months of 2016 compared with the same
period for 2015. However, global production for carbon steel grew in September
2016 compared both with September 2015 (+1.5%), and August 2016 (+2.4%).
World ore production was down in first-quarter 2016 (temporary or permanent
closures of some mines, lowered production rates in others), in a particularly
difficult market, with a low point for prices reached in February 2016 at USD
1.83/dmtu CIF Chine 44% (source CRU). This then led to a fall in global ore
stocks, causing prices to pick up again from April. Logistical and production
problems encountered by different operators in the second and third quarters of
2016 then limited supply, whereas demand in China recovered during the period.
Against this backdrop, CIF China 44% manganese ore prices (source CRU) rose
sharply from the start of second-half 2016 (USD 2.81/dmtu in July, USD
3.53/dmtu in August and USD 4.48/dmtu in September). The price level for October
stood at USD 6.24/dmtu. Very high price volatility has therefore been observed
since the start of 2016. Current price levels will probably lead to restart some
production capacity that had been put on standby under the market conditions of
early 2016. An increase in production for the majority of players is likely. To
a lesser extent, manganese alloys prices have also risen since the start of
second-half 2016.
In Moanda, Gabon, production for ERAMET Manganese stood at 2.4 million tonnes of
ore over the first nine months, down by 18% compared with the same period in
2015, notably due to a shutdown in production decided by the Group in first-half
2016, to take into account market conditions which were then very depressed.
* TiZir (50/50 joint venture with Mineral Deposits Limited)
The titanium dioxide pigments market, the main outlet for titanium dioxide slag
from TiZir's Norwegian plant, continued to make progress over the third quarter
of 2016. The market was bolstered by strong demand in North America and Europe.
Prices for ilmenite (titanium ore) and titanium dioxide slag remained generally
stable with, however, some price increases on ilmenite for China. Zircon prices
(notably for the ceramics industry) remained stable over the quarter, with a
stronger market in Europe and North America.
The production of heavy mineral concentrate (HMC) in Senegal came out at
140,000 tonnes in third-quarter 2016, at a stable level compared with previous
quarters.
A localised fire, which was rapidly controlled, took place on 15 August 2016 at
the TiZir plant in Norway. Taking into account observations made during the
repair and heating period carried out since 22 September the decision has been
made to proceed to relining. The furnace should restart mid-January 2017 with a
ramp up to previous production level over the ensuing four weeks.
* Financial situation
ERAMET has increased its equity by 100 million euros through the issue of net
share settled undated bonds convertible into new shares (ODIRNAN).
At end-September, the cost reduction and productivity improvement programmes are
being pursued by all of the Group's entities, in line with the established
objectives.
* Outlook
Taking into account, on the one hand, the current rise in manganese prices and
to a lesser extent, the rise in nickel prices, and, on the other hand, the
successful implementation of productivity and cost reduction plans, the ERAMET
Group's current operating income for second-half 2016 is expected to be
significantly higher than that of first-half 2016 and become positive again.
- ooOoo -
--------------------------------------------------------------------------------
ABOUT ERAMET
ERAMET is a leading global producer of:
* alloying metals, particularly manganese and nickel, used to improve the
properties of steel,
* high-performance special steels and alloys used in industries such as
aerospace, power generation and tooling.
ERAMET is also developing activities with high growth potential, such as mineral
sands (titanium dioxide and zirconium), lithium and recycling. The Group employs
approximately 14,000 people in 20 countries.
CONTACT
Vice President Strategy and Financial Communication
Philippe Gundermann
Tel: +33 (0)1 45 38 42 78
Strategic and Financial Communication Analyst
Arthur Perroton
Tel: +33 (0)1 45 38 37 32
Strategic and Financial Communication Analyst
Ludovic Donati
Tel: +33 (0)1 45 38 42 88
For more information: www.eramet.com
--------------------------------------------------------------------------------
APPENDICES
Appendix 1: Sales
-------------------------------------------------------------------------------
Sales (? million) Q3 2016 Q2 2016 Q1 2016 Q4 2015 Q3 2015
-------------------------------------------------------------------------------
ERAMET Nickel 154 137 118 144 146
ERAMET Alloys 206 247 250 263 218
ERAMET Manganese 353 323 297 337 375
Holding company & eliminations 1 - 1 - -
ERAMET Group 714 707 666 744 739
Including joint ventures
Joint ventures share (22) (28) (16) (19) (29)
ERAMET Group 692 679 650 725 710
IFRS published financial statements(1)
(1) Application of IFRS 11 "Joint Arrangements".
Appendix 2: Production and shipments
----------------------------------------------------+--------------------------
In tonnes Q3 2016 Q3 2015 Change| 9 months 9 months Change
| 2016 2015
----------------------------------------------------+--------------------------
Nickel production(1) 15,599 13 488 16%| 41,335 39,767 4%
-------+
Nickel sales(2) 13,978 12 550 11%| 40,442 40,800 (1%)
-------+
Production of manganese 910,000 1 072 800 (15%)|2,426,000 2,950,000 (18%)
ore and sinter |
-------+
Manganese alloy production 181,000 180 400 0%| 530,000 533,100 (1%)
-------+
Manganese alloy sales 175,000 184 100 (5%)| 545,000 529,500 3%
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(1) Ferronickel and matte
(2) Finished products
3rd quarter 2016 sales:
http://hugin.info/143395/R/2055403/769686.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Groupe Eramet via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 09.11.2016 - 07:59 Uhr
Sprache: Deutsch
News-ID 505773
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